With Donald Trump securing victory in the presidential race and the Republicans sweeping Congress, here is the immediate market reaction and implications.

The picture is one of uncertainty and the sell-off was less than it had looked at one stage overnight. Markets in Europe have not reacted as expected, perhaps because Trump's victory speech assuaged some of the worst fears about what his presidency could bring.

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Equities

US stock futures were initially sold off in grand style, with the Dow Jones shedding 800 points at one point, before paring losses to sit at 17968. S&P 500 futures dropped 100 pts to 2045 before trading down 43 points at 2093. Futures trading US equity markets had initially looked set to record one of their steepest losses in recent memory, but since Trump's victory speech there seems to be strength coming back into the market.

The FTSE opened sharply lower at 6567, a fall of 250 pts but subsequently pared losses to trade roughly 54 points lower at 6763. Dragging the FTSE higher were some impressive gains for pharmaceutical stocks and miners Fresnillo and Randgold.

Analysts predicted major losses for stock markets, potentially 10%+ correction territory for the Euro Stoxx 600 and others, but after an hour of trading the markets were well short of that.

Forex

Dollar down across the board, heavily against safe havens. But again no real momentum here either. Swiss franc and Japanese yen chief risers and both central banks could intervene to stem gains. Having traded at 101.2, USDJPY quickly returned to 103.4, still lower for the day.

Sterling was up a little, climbing above $1.25 again but little real momentum as Brexit and Article 50 considerations still dominate. Nearly back to $1.24 by 9am on November 9th.

Expectations for the Federal Reserve to raise interest rates in December have collapsed off the back of the result, pressuring the buck.

But the biggest loser is the Mexican peso, which notched up record losses to reach an all-time low. USDMXN jumped over 10% to trade above 20.

Gold

Amid a flight to safety, gold rallied strongly to above $1, 315. Gold was expected to rise firmly on a Trump win, but again it's come off those highs to trade below the $1,300 handle.

Bonds

US government bond yields sank as investors sought shelter, with expectations the Fed dialling back on hiking rates a key consideration also. The yield on the US 2-year note, which is most sensitive to short term interest rate expectations, slumped 10% before easing back to a 5% dip. 



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